LACPA- IFRS Seminars

1. IAS 1 Presentation of Financial Statements Presented by – Roger Nasr, Deloitte LACPA- IFRS Seminars

2. IAS 1 Structure of the standard • Objective and scope • Purpose of Financial statements • Components of Financial Statements • Definitions • Overall considerations • Structure and content

3. IAS 1 Objective and scope • Objective • to prescribe basis for presentation of “General Purpose” financial statements • in order to ensure comparability • Scope • all general purpose financial statements prepared under IFRS • not condensed interim financial information

4. Purpose of Financial statements • Structured Presentation of • Financial Position • Financial Performance • Results of Management Stewardship of the resources entrusted to it

5. IAS 1 Components, complete set of financial statements • Balance sheet • Income statement • Statement of changes in equity • Cash flow statement • Notes • Accounting policies • Explanatory notes

6. Definitions • Impracticable requirement • Entity can not apply it after making every reasonable effort • IFRS • IFRS, IAS, IFRIC or SIC • Material • Omission or misstatement is material if it can influence the economic decision of users

7. IAS 1 Overall considerations • Fair presentation • achieved through application of IFRS • disclose compliance with IFRS • full compliance with IFRS required • application before effective date • disclose that fact • true and fair override • only in extremely rare circumstances

8. IAS 1 Overall considerations • Fair presentation • In extremely rare circumstances, where compliance with a Standard would be misleading so it would conflict with objective set out in the framework • departure is permissible, if regulatory framework requires or does not prohibit • Specified disclosure required

9. IAS 1 Overall considerations • Going concern • no intention to liquidate or to cease trading • Disclose in case of Material uncertainty • Accrual basis - transactions and events • are recognised when they occur, and • in the periods to which they relate • Consistency • presentation & classification be retained • Unless change in nature of operations necessitates another presentation • A standard or an interpretation requires a change

10. IAS 1 Overall considerations Materiality & aggregation • material  present separately • immaterial aggregate with other items • Offsetting • Assets/Liabilities, and Income and expenses shall not be offset unless required or permitted • Comparative information • incl. narrative & descriptive information

11. IAS 1 Structure and content • General • identification of financial statements • clearly distinguished from other information • reporting period • at least annually, • to explain if longer or shorter • Information required • Name and change, if any • Individual or group financials • Period covered • Currency • Level of rounding

12. IAS 1 Structure and content • Balance sheet • current vs. non-current distinction • or, classify based on liquidity if more relevant • obligatory line items on face of B/S • disclosure required on face or in notes • relevant sub-classifications of items above • information on share capital and reserves

13. Structure and content • Minimum Items on face of Balance Sheet • Property, Plant and Equipment • Investment Property • Intangible Assets • Financial Assets • Investments Accounted for using the equity method • Biological Assets • Inventories • Trade and Other receivables • Cash and Cash Equivalents • Trade and Other Payables • Provisions • Financial liabilities • Liabilities and Assets for current tax • Deferred tax assets and liabilities • Minority interest within equity • Issued Capital and reserves attributable to equity holders of the parent

14. IAS 1 Structure and content • Current vs. non-current Assets • Realised/settled in the normal course of operating cycle or within 12 month of the balance sheet date • Held primarily for the purpose of being traded • Unrestricted cash or a cash equivalent • All other assets are non-Current

15. Structure and content • Current Vs. non Current Liabilities • Settled in the normal course of operating cycle or due to be settled within 12 month of the balance sheet date • Held primarily for the purpose of being traded • No unconditional right to defer settlement for at least 12 months • post-balance sheet events (refinancing, correction of defaults) do not affect current vs. non-current classification • All other Liabilities are non-Current

16. IAS 1 Structure and content • Income statement • obligatory line items on face of I/S • To show as allocation • Profit or loss attributable to Minority Interest • Profit or loss attributable to equity holders of the parent • expenses analysed on basis of • nature • Function • Dividends should be disclosed plus per share (or in statement of changes in equity

17. Structure and content • Minimum Items on the face of the income statement • Revenue • Finance Costs • Share of profit/loss of associates accounted for at the equity method • Tax expense • Sum of profit or loss on discontinued operations plus gain or loss on the disposal of discontinued operations assets • Profit or loss • No operating income/loss • No extraordinary items

18. IAS 1 Structure and content • Income Statement presentation • classification based on nature • salaries, depreciation, transport, etc • classification based on function • cost of sales, distribution, administration

19. IAS 1 Structure and content • Statement of changes in equity • separate component of financial statements • On the face • (a) Profit or loss for the period • (b) gains and losses not reflected in income statement • (a)+(b) attributable to each of Minority Interest and equity holders of the parent • also in statement or in the notes • capital transactions with owners • movements in accumulated profit • movements in capital and reserves

20. IAS 1 Structure and content • Role of statement of changes in equity • broader performance indicator • ‘total recognised gains and losses’ or • ‘comprehensive income’ • Cash flow statement in accordance with IAS 7

21. IAS 1 Structure and content • Notes to the financial statements • basis of preparation of financial statements • accounting policies selected • additional disclosure to present fairly • other sundry disclosures • e.g. domicile, legal form, country of incorporation

22. IAS 1 • Case study 01 • Income statement presentation

23. Classification by function